Limestone Bancorp Reports Net Income of $5.8 million, or $0.76 per Diluted Share, for the 3rd Quarter of 2022 and $13.4 million, or $1.76 per Diluted Share, for the Nine Months Ended September 30, 2022

Rhea-AI Summary

Limestone Bancorp reported its third quarter 2022 financial results, showing net income of $5.8 million ($0.76 per share), up from $4.3 million ($0.57 per share) a year ago. For the first nine months, net income reached $13.4 million compared to $11.5 million in 2021. Total assets increased to $1.49 billion, with loans up 5.0% quarterly to $1.13 billion. Despite a 12 basis point rise in net interest margin to 3.73%, non-interest income fell to $2.2 million from $2.4 million a year prior. Total deposits rose to $1.22 billion, while non-interest expenses increased by 8.0% to $8.7 million.

Positive

• Net income rose to $5.8 million for Q3 2022, a 34.9% increase YoY.
• Total assets increased to $1.49 billion, up $72.6 million from the previous quarter.
• Loan growth of 5.0% in Q3 2022, totaling $1.13 billion.
• Net interest margin expanded to 3.73%, up from 3.61% YoY.

Negative

• Non-interest income decreased by $208,000 compared to Q3 2021.
• Non-interest expenses increased by 8.0% to $8.7 million in Q3 2022.

LOUISVILLE, Ky.--(BUSINESS WIRE)-- Limestone Bancorp, Inc. (NASDAQ: LMST) (the “Company”), parent company of Limestone Bank, Inc. (the “Bank”), today reported unaudited results for the third quarter of 2022. Net income available to common shareholders for the third quarter of 2022 was $5.8 million, or $0.76 per basic and diluted common share, compared with $4.3 million, or $0.57 per basic and diluted common share, for the third quarter of 2021. Net income for the nine months ended September 30, 2022, was $13.4 million, or $1.76 per basic and diluted common share, compared with net income of $11.5 million, or $1.51 per basic and diluted common share, for the nine months ended September 30, 2021.

John T. Taylor, Chief Executive Officer, noted, “The Limestone team delivered strong performance results in the third quarter and for the first nine months of 2022. Deposit gathering efforts remain successful and loan growth was 5.0% in the third quarter and 12.6% for the first nine months of the year. Asset quality remains strong and net interest margin expanded 12 basis points quarter over quarter, which is directionally consistent with the Fed’s tightening actions and our approach to interest rate risk management.”

Total assets were $1.49 billion at September 30, 2022, up $72.6 million from the previous quarter. The loan portfolio increased $54.1 million, or 5.0%, during the quarter to $1.13 billion at September 30, 2022. Total deposits increased $51.0 million to $1.22 billion at September 30, 2022.

Net Interest Income and Average Earning Assets – Net interest income increased to $12.9 million for the third quarter of 2022, compared to $11.7 million for the second quarter of 2022, and $11.6 million for the third quarter of 2021. Net interest margin increased to 3.73% for the third quarter of 2022, compared with 3.51% for the second quarter of 2022, and 3.61% for the third quarter of 2021.

The yield on earning assets increased to 4.37% in the third quarter of 2022, compared to 3.95% in the second quarter of 2022, and 4.03% in the third quarter of 2021. Quarter over quarter, average loans increased $43.4 million to $1.10 billion. Compared to the prior year third quarter, average loans increased $143.9 million, average investment securities increased $7.4 million, and average lower yielding fed funds sold decreased $56.2 million. PPP loans averaged $157,000 for the third quarter of 2022, $172,000 for the second quarter of 2022, and $12.6 million for the third quarter of 2021.

The Federal Reserve increased the fed funds target by 25 basis points on March 16, 2022, 50 basis points on May 4, 2022, 75 basis points on June 15, 2022, 75 basis points on July 26, 2022, and 75 basis points on September 20, 2022. During the second and third quarters of 2022, the Bank’s fed funds sold, floating rate investment securities, loans with variable rate pricing features, and new loan originations benefitted from the upward movement in short-term rates and are expected to continue to benefit as rates continue to rise. The cost of interest-bearing liabilities has also been impacted to a lesser extent but is also expected to continue to increase as short-term interest rates continue to rise.

Loan fee income can meaningfully impact net interest income, loan yields, and net interest margin. The amount of loan fee income included in total interest income was $279,000, $173,000, and $1.5 million for the quarters ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively. This represents eight basis points, six basis points, and 48 basis points of yield on earning assets and net interest margin for the quarters ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively. Loan fee income for the third and second quarters of 2022 did not include any fees earned on PPP loans, compared to $1.4 million in the third quarter of 2021, which represents 43 basis points of earning asset yield and net interest margin for the third quarter of 2021.

The following table reconciles the as reported yield on earning assets to the yield on earning assets excluding PPP fees, a non-GAAP financial measure:

	Three Months Ended
	9/30/22			6/30/22			3/31/22			12/31/21			9/30/21
	(in thousands)
Yield on Earning Assets, as reported		4.37	%		3.95	%		3.82	%		3.71	%		4.03	%
Less Impact of PPP Fees		—			—			0.02			0.08			0.43
Yield on Earning Asset excluding PPP Fees		4.37	%		3.95	%		3.80	%		3.63	%		3.60	%

The cost of interest-bearing liabilities was 0.85% for the third quarter of 2022, compared to 0.58% in the second quarter of 2022, and 0.56% in the third quarter of 2021. While deposit mix has continued to improve as compared to the prior year third quarter, the movement in short-term rates has impacted the cost of interest-bearing liabilities. Future short-term rate increases are expected to further impact the cost of interest-bearing liabilities.

Net interest income increased to $35.7 million for the first nine months of 2022, compared with $33.2 million in the first nine months of 2021. Net interest margin increased to 3.56% in the first nine months of 2022, compared with 3.53% for the first nine months of 2021.

The yield on earning assets increased to 4.05% for the first nine months of 2022, compared to 4.00% for the first nine months of 2021. During the first nine months of 2022 average loans increased $100.0 million to $1.06 billion and average investment securities increased $30.8 million, while average lower yielding fed funds sold decreased $45.4 million compared to the first nine months of 2021. Average PPP loans were $340,000 and $19.4 million for the first nine months of 2022 and 2021, respectively. The amount of loan fee income included in total interest income was $776,000 and $3.3 million for the nine months ended September 30, 2022 and 2021, respectively. This represents eight basis points and 35 basis points of yield on earning assets and net interest margin for the nine months ended September 30, 2022 and 2021, respectively. Loan fee income included PPP fees of $45,000 and $2.5 million for the nine months ended September 30, 2022 and 2021, respectively, which represented approximately one basis point and 27 basis points of earning asset yield and net interest margin for those nine-month periods, respectively.

The cost of interest-bearing liabilities was 0.66% for the first nine months of 2022, compared to 0.62% in the first nine months of 2021. While deposit mix has continued to improve as compared to the prior year, the cost of interest-bearing liabilities was impacted by the recent increases in short-term interest rates and is expected to continue to increase as short-term interest rates continue to rise.

Time deposits increased $17.6 million during the third quarter of 2022. Approximately $47.9 million of time deposits with an average rate of 0.58% matured and were redeemed or repriced during the third quarter of 2022. During the third quarter of 2022, newly originated or renewed time deposits had an average rate of 2.27% and an average term of approximately 13 months. As of September 30, 2022, time deposits comprised $273.8 million of the Company’s liabilities including $57.1 million with a current average rate of 0.79%, which reprice or mature in the fourth quarter of 2022. The following table denotes contractual time deposit maturities and average rates as of September 30, 2022:

	Maturity Quarter		As of September 30, 2022 (in thousands)				Weighted Average Rate
	Q4-2022			57,052			0.79
	Q1-2023			66,691			0.89
	Q2-2023			61,390			2.12
	Q3-2023			24,036			0.61
	Thereafter			64,611			0.86
	Total time deposits		$	273,780			1.11	%

Provision and Allowance for Loan Losses – The allowance for loan losses to total loans was 1.16% at September 30, 2022, compared to 1.17% at June 30, 2022, and 1.34% at September 30, 2021.

Net loan recoveries were $1.7 million and $1.6 million, for the three and nine months ended September 30, 2022, compared to net loan recoveries of $36,000 and net loan charge-offs of $120,000, for the three and nine months ended September 30, 2021. During the third quarter of 2022, the Bank received a payoff of $2.0 million on a nonaccrual commercial real estate loan resulting in a recovery of $1.5 million. A negative provision for loan losses of $1,250,000 and $50,000, or $(0.12) and $(0.01) per common share after taxes, was recorded in the third quarter and the first nine months of 2022, respectively, compared to a provision for loan losses of $300,000 and $650,000, or $0.03 and $0.06 per common share after taxes, for the three and first nine months of 2021. The 2022 negative loan loss provisions were primarily attributable to the significant recovery recognized during the third quarter and its impact on the historical loss percentages, offset by the additional reserve required by the growth trends within the portfolio during the periods. The 2021 loan loss provisions were attributable to growth trends within the portfolio and net loan charge-offs impacting historical loss percentages during the periods.

Non-interest Income and Expense – Non-interest income for the third quarter of 2022 decreased $208,000 to $2.2 million, compared with $2.4 million for the third quarter of 2021. The third quarter of 2021 included a $465,000 gain on the call of a corporate bond from the Bank’s available for sale securities portfolio. Service charges on deposit accounts increased $165,000 due to an increase in transaction volumes. Non-interest expense increased $647,000, or 8.0%, to $8.7 million for the third quarter of 2022, compared with $8.1 million for the third quarter of 2021. Salaries and benefits expense increased $377,000 from the third quarter of 2021 as a result of the inflationary impact on talent acquisition and the administration of annual salary adjustments, increased health care utilization costs, and a modest increase in performance-based incentive compensation. Other non-interest expense increased $214,000 from the third quarter of 2021 primarily related to an increase in losses associated with demand deposit charge-offs and fraudulent check and debit card activity during the period.

Non-interest income for the first nine months of 2022 increased $267,000 to $6.7 million, compared with $6.5 million for the first nine months of 2021. The increase was primarily due to an increase in services charges on deposit accounts of $421,000 due to an increase in transaction volumes, as well as a $179,000 increase in bank owned life insurance income due to additional policies being purchased in March 2022. Non-interest income for the first nine months of 2022 also included a $163,000 gain on sale of premises held for sale from the first quarter of 2022, while the first nine months of 2021 included a $191,000 gain on sale of OREO from the second quarter of 2021, as well as, a $465,000 gain on the call of a corporate bond from the third quarter of 2021. Non-interest expense increased $907,000, or 3.8%, to $24.9 million for the first nine months of 2022, compared with $24.0 million for the first nine months of 2021. The increase was primarily due to an increase of $643,000 in salaries and benefits as discussed above, and a $328,000 increase in other non-interest expense primarily related to losses associated with demand deposit charge-offs and fraudulent check and debit card activity during the period.

About Limestone Bancorp, Inc.
Limestone Bancorp, Inc. (NASDAQ: LMST) is a Louisville, Kentucky-based bank holding company which operates banking centers in 14 counties through its wholly-owned subsidiary Limestone Bank. The Bank’s markets include metropolitan Louisville in Jefferson County and the surrounding counties of Bullitt and Henry and extend south along the Interstate 65 corridor. The Bank serves south central, southern, and western Kentucky from banking centers in Barren, Butler, Daviess, Edmonson, Green, Hardin, Hart, Ohio, and Warren counties. The Bank also has banking centers in Lexington, Kentucky, the second largest city in the state, and Frankfort, Kentucky, the state capital. Limestone Bank is a traditional community bank with a wide range of personal and business banking products and services.

Forward-Looking Statements
Statements in this press release relating to Limestone Bancorp’s plans, objectives, expectations or future performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “may,” “should,” “anticipate,” “estimate,” “expect,” “intend,” “objective,” “possible,” “seek,” “plan,” “strive” or similar words, or negatives of these words, identify forward-looking statements that involve risks and uncertainties. Although the Company's management believes the assumptions underlying the forward-looking statements contained herein are reasonable, any of these assumptions could be inaccurate. Therefore, there can be no assurance the forward-looking statements included herein will prove to be accurate. Factors that could cause actual results to differ from those discussed in forward-looking statements include, but are not limited to: the impact and duration of the COVID-19 pandemic; economic conditions both generally and more specifically in the markets in which the Company and its subsidiaries operate; competition for the Company's customers from other providers of financial services; government legislation and regulation, which change from time to time and over which the Company has no control; changes in inflation and efforts to control it; changes in interest rates; material unforeseen changes in liquidity, results of operations, or financial condition of the Company's customers; and other risks detailed in the Company's filings with the Securities and Exchange Commission, all of which are difficult to predict and many of which are beyond the control of the Company. See Risk Factors outlined in the Company's Form 10-K for the year ended December 31, 2021.

Additional Information
Unaudited supplemental financial information for the third quarter ending September 30, 2022, follows.

LIMESTONE BANCORP, INC. Unaudited Financial Information (in thousands, except share and per share data)
	Three				Three				Nine				Nine
	Months				Months				Months				Months
	Ended				Ended				Ended				Ended
	9/30/22				9/30/21				9/30/22				9/30/21
Income Statement Data
Interest income	$	15,121			$	12,975			$	40,670			$	37,601
Interest expense		2,209				1,354				4,964				4,386
Net interest income		12,912				11,621				35,706				33,215
Provision (negative provision) for loan losses		(1,250	)			300				(50	)			650
Net interest income after provision		14,162				11,321				35,756				32,565
Service charges on deposit accounts		748				583				2,072				1,651
Bank card interchange fees		1,061				1,044				3,151				3,077
Bank owned life insurance income		148				112				599				420
Gain on sale of OREO		—				—				—				191
Gain (loss) on sales and calls of securities, net		—				465				(3	)			460
Gain on sale of premises held for sale		—				—				163				—
Other		271				232				740				656
Non-interest income		2,228				2,436				6,722				6,455
Salaries & employee benefits		4,959				4,582				14,174				13,531
Occupancy and equipment		1,134				1,024				3,218				3,063
Deposit account related expense		571				545				1,692				1,592
Data processing expense		402				378				1,191				1,133
Professional fees		206				219				663				701
Marketing expense		159				200				464				561
FDIC insurance		90				90				270				315
Deposit tax		99				90				297				270
Communications expense		108				153				293				520
Insurance expense		104				105				318				324
Postage and delivery		156				169				469				460
Other		709				495				1,846				1,518
Non-interest expense		8,697				8,050				24,895				23,988
Income before income taxes		7,693				5,707				17,583				15,032
Income tax expense		1,880				1,366				4,155				3,568
Net income	$	5,813			$	4,341			$	13,428			$	11,464
Weighted average shares – Basic		7,639,492				7,602,686				7,628,677				7,591,800
Weighted average shares – Diluted		7,639,492				7,602,686				7,628,677				7,591,800
Basic earnings per common share	$	0.76			$	0.57			$	1.76			$	1.51
Diluted earnings per common share	$	0.76			$	0.57			$	1.76			$	1.51
Cash dividends declared per common share	$	0.05			$	0.00			$	0.15			$	0.00
Performance Ratios
Return on average assets		1.59	%			1.26	%			1.26	%			1.14	%
Return on average equity		17.83				13.61				13.87				12.57
Yield on average earning assets (tax equivalent)		4.37				4.03				4.05				4.00
Cost of interest-bearing liabilities		0.85				0.56				0.66				0.62
Net interest margin (tax equivalent)		3.73				3.61				3.56				3.53
Efficiency ratio1		57.44				59.23				58.67				61.18
Non-interest expense to average assets		2.38				2.33				2.34				2.38

LIMESTONE BANCORP, INC. Unaudited Financial Information (in thousands, except share and per share data)
		Three			Three				Three					Three				Three
		Months			Months				Months					Months				Months
		Ended			Ended				Ended					Ended				Ended
		9/30/22			6/30/22				3/31/22					12/31/21				9/30/21
Income Statement Data
Interest income	$	15,121			$	13,122			$	12,427			$	12,314			$	12,975
Interest expense		2,209				1,442				1,313				1,307				1,354
Net interest income		12,912				11,680				11,114				11,007				11,621
Provision (negative provision) for loan losses		(1,250	)			450				750				500				300
Net interest income after provision		14,162				11,230				10,364				10,507				11,321
Service charges on deposit accounts		748				690				634				605				583
Bank card interchange fees		1,061				1,087				1,003				1,039				1,044
Bank owned life insurance income		148				249				202				106				112
Gain (loss) on sales and calls of securities, net		—				(3	)			—				—				465
Gain on sale of premises held for sale		—				—				163				—				—
Other		271				233				236				234				232
Non-interest income		2,228				2,256				2,238				1,984				2,436
Salaries & employee benefits		4,959				4,651				4,564				4,601				4,582
Occupancy and equipment		1,134				1,055				1,029				978				1,024
Deposit account related expense		571				574				547				566				545
Data processing expense		402				403				386				379				378
Professional fees		206				236				221				251				219
Marketing expense		159				172				133				166				200
FDIC insurance		90				90				90				90				90
Deposit tax		99				99				99				105				90
Communications expense		108				121				64				161				153
Insurance expense		104				109				105				91				105
Postage and delivery		156				150				163				145				169
Other		709				567				570				450				495
Non-interest expense		8,697				8,227				7,971				7,983				8,050
Income before income taxes		7,693				5,259				4,631				4,508				5,707
Income tax expense		1,880				1,223				1,052				1,063				1,366
Net income	$	5,813			$	4,036			$	3,579			$	3,445			$	4,341
Weighted average shares – Basic		7,639,492				7,631,883				7,614,382				7,597,256				7,602,686
Weighted average shares – Diluted		7,639,492				7,631,883				7,614,382				7,597,256				7,602,686
Basic earnings per common share	$	0.76			$	0.53			$	0.47			$	0.45			$	0.57
Diluted earnings per common share	$	0.76			$	0.53			$	0.47			$	0.45			$	0.57
Cash dividends declared per common share	$	0.05			$	0.05			$	0.05			$	0.00			$	0.00
Performance Ratios
Return on average assets		1.59	%			1.14	%			1.03	%			0.97	%			1.26	%
Return on average equity		17.83				12.66				11.07				10.51				13.61
Yield on average earning assets (tax equivalent)		4.37				3.95				3.82				3.71				4.03
Cost of interest-bearing liabilities		0.85				0.58				0.53				0.53				0.56
Net interest margin (tax equivalent)		3.73				3.51				3.42				3.32				3.61
Efficiency ratio1		57.44				59.02				59.70				61.45				59.23
Non-interest expense to average assets		2.38				2.33				2.30				2.25				2.33

LIMESTONE BANCORP, INC. Unaudited Financial Information (in thousands, except share and per share data)
		As of
	9/30/22				6/30/22				3/31/22				12/31/21				9/30/21
Assets
Loans	$	1,127,945			$	1,073,815			$	1,047,285			$	1,001,840			$	968,088
Allowance for loan losses		(13,031	)			(12,550	)			(12,195	)			(11,531	)			(12,973	)
Net loans		1,114,914				1,061,265				1,035,090				990,309				955,115
Securities held to maturity2		43,350				44,205				45,639				46,460				47,539
Securities available for sale2		181,292				193,022				204,071				214,213				203,548
Federal funds sold & interest-bearing deposits		50,940				18,244				22,040				67,110				44,909
Cash and due from financial institutions		6,430				7,742				10,009				10,493				13,579
Premises and equipment		22,503				22,747				23,043				21,575				21,623
Premises held for sale		—				—				—				310				980
Bank owned life insurance		31,032				30,888				30,643				23,946				23,845
FHLB Stock		5,176				5,116				5,116				5,116				5,116
Deferred taxes, net		23,002				23,343				22,648				21,583				22,161
Goodwill		6,252				6,252				6,252				6,252				6,252
Intangible assets		1,797				1,861				1,925				1,989				2,053
Accrued interest receivable and other assets		7,007				6,383				6,230				6,336				6,128
Total Assets	$	1,493,695			$	1,421,068			$	1,412,706			$	1,415,692			$	1,352,848
Liabilities and Equity
Certificates of deposit	$	273,780			$	256,141			$	260,064			$	266,011			$	280,545
Interest checking		286,867				269,240				274,054				287,208				239,923
Money market		215,450				209,183				216,845				217,943				198,470
Savings		154,545				163,573				166,135				163,423				163,018
Total interest-bearing deposits		930,642				898,137				917,098				934,585				881,956
Demand deposits		287,938				269,425				281,533				274,083				266,035
Total deposits		1,218,580				1,167,562				1,198,631				1,208,668				1,147,991
FHLB advances		90,000				70,000				30,000				20,000				20,000
Junior subordinated debentures		21,000				21,000				21,000				21,000				21,000
Subordinated capital note		25,000				25,000				25,000				25,000				25,000
Accrued interest payable and other liabilities		10,744				10,888				9,855				10,065				10,193
Total liabilities		1,365,324				1,294,450				1,284,486				1,284,733				1,224,184
Total stockholders’ equity		128,371				126,618				128,220				130,959				128,664
Total Liabilities and Stockholders’ Equity	$	1,493,695			$	1,421,068			$	1,412,706			$	1,415,692			$	1,352,848
Ending shares outstanding		7,639,033				7,640,680				7,622,157				7,594,749				7,602,686
Book value per common share	$	16.80			$	16.57			$	16.82			$	17.24			$	16.92
Tangible book value per common share3		15.75				15.51				15.75				16.16				15.83

LIMESTONE BANCORP, INC. Unaudited Financial Information (in thousands, except share and per share data)
		As of
	9/30/22				6/30/22				3/31/22				12/31/21				9/30/21
Average Balance Sheet Data
Assets	$	1,451,647			$	1,417,087			$	1,407,030			$	1,405,219			$	1,369,372
Loans		1,096,478				1,053,057				1,028,546				955,516				952,567
Earning assets		1,378,771				1,339,555				1,326,234				1,322,821				1,284,188
Deposits		1,203,098				1,184,426				1,199,174				1,199,334				1,166,785
Long-term debt and advances		108,229				93,968				67,667				66,000				66,000
Interest bearing liabilities		1,029,131				1,000,367				996,710				982,132				954,007
Stockholders’ equity		129,346				127,827				131,097				129,998				126,556
Asset Quality Data
Nonaccrual loans	$	1,054			$	3,007			$	3,447			$	3,124			$	1,627
Troubled debt restructurings on accrual		146				150				333				340				561
Loan 90 days or more past due still on accrual		—				—				—				—				—
Total non-performing loans		1,200				3,157				3,780				3,464				2,188
Real estate acquired through foreclosures		—				—				—				—				—
Other repossessed assets		—				—				—				—				—
Total non-performing assets	$	1,200			$	3,157			$	3,780			$	3,464			$	2,188
Non-performing loans to total loans		0.11	%			0.29	%			0.36	%			0.35	%			0.23	%
Non-performing assets to total assets		0.08				0.22				0.27				0.24				0.16
Allowance for loan losses to non-performing loans		1,085.92				397.53				322.62				332.88				592.92
Allowance for loan losses to total loans		1.16	%			1.17	%			1.16	%			1.15	%			1.34	%
Loan Charge-off Data
Loans charged off	$	(86	)		$	(367	)		$	(227	)		$	(2,246	)		$	(25	)
Recoveries		1,817				272				141				304				61
Net (charge-offs) recoveries	$	1,731			$	(95	)		$	(86	)		$	(1,942	)		$	36
Loans by Risk Category4
Pass	$	1,116,009			$	1,052,624			$	1,023,039			$	977,962			$	945,396
Watch		3,177				6,426				8,567				7,856				3,407
Special Mention		—				—				—				—				—
Substandard		8,759				14,765				15,679				16,022				19,285
Doubtful		—				—				—				—				—
Total	$	1,127,945			$	1,073,815			$	1,047,285			$	1,001,840			$	968,088
Loans by Past Due Status
Past due loans:
30 – 59 days	$	300			$	600			$	1,108			$	556			$	630
60 – 89 days		57				209				89				210				142
90 days or more		—				—				—				—				—
Nonaccrual loans		1,054				3,007				3,447				3,124				1,627
Total past due and nonaccrual loans	$	1,411			$	3,816			$	4,644			$	3,890			$	2,399

LIMESTONE BANCORP, INC. Unaudited Financial Information (in thousands, except share and per share data)
		As of
	9/30/22				6/30/22				3/31/22				12/31/21				9/30/21
Risk-based Capital Ratios - Company
Tier I leverage ratio		10.04	%			9.68	%			9.38	%			9.14	%			9.39	%
Common equity Tier I risk-based capital ratio		9.46				9.16				8.93				9.00				9.37
Tier I risk-based capital ratio		10.89				10.49				10.19				10.38				10.86
Total risk-based capital ratio		13.75				13.39				13.12				13.41				14.13
Risk-based Capital Ratios – Limestone Bank
Tier I leverage ratio		11.56	%			11.39	%			11.20	%			10.84	%			10.96	%
Common equity Tier I risk-based capital ratio		12.55				12.38				12.21				12.35				12.68
Tier I risk-based capital ratio		12.55				12.38				12.21				12.35				12.68
Total risk-based capital ratio		13.53				13.35				13.17				13.31				13.80
FTE employees, end of period		226				225				222				227				232

Footnotes:

(1) The efficiency ratio is a non-GAAP measure of expense control relative to revenue from net interest income and fee income. The efficiency ratio is calculated by dividing total non-interest expenses as determined under GAAP by net interest income and total non-interest income, but excluding from the calculation net gains on the sale of securities and expenses disclosed from time to time as non-recurring in nature. Management believes this provides a reasonable measure of primary banking expenses relative to primary banking revenue.

	Three Months Ended
	9/30/22				6/30/22				3/31/22				12/31/21				9/30/21
Efficiency Ratio	(in thousands)
Net interest income	$	12,912			$	11,680			$	11,114			$	11,007			$	11,621
Non-interest income		2,228				2,256				2,238				1,984				2,436
Less: Net gain (loss) on securities		—				(3	)			—				—				465
Revenue used for efficiency ratio		15,140				13,939				13,352				12,991				13,592
Non-interest expense		8,697				8,227				7,971				7,983				8,050
Efficiency ratio		57.44	%			59.02	%			59.70	%			61.45	%			59.23	%

		Nine Months Ended
	9/30/22				9/30/21
		(in thousands)
Efficiency Ratio
Net interest income	$	35,706			$	33,215
Non-interest income		6,722				6,455
Less: Net gain (loss) on securities		(3	)			460
Revenue used for efficiency ratio		42,431				39,210
Non-interest expense		24,895				23,988
Efficiency ratio		58.67	%			61.18	%

(2) Investment Securities – The following table sets forth the amortized cost and fair value of our securities portfolio at the dates indicated.

	September 30, 2022														June 30, 2022
	Amortized Cost				Gross Unrealized Gains			Gross Unrealized Losses				Fair Value			Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses				Fair Value
	(dollars in thousands)
Securities available for sale
U.S. Government and federal agencies	$	24,810			$	—		$	(2,864	)		$	21,946		$	26,438		$	—		$	(2,062	)		$	24,376
Agency mortgage-backed residential		82,193				16			(11,777	)			70,432			87,182			42			(8,864	)			78,360
Collateralized loan obligations		48,209				—			(2,221	)			45,988			48,216			—			(2,038	)			46,178
Corporate bonds		45,493				9			(2,576	)			42,926			45,473			16			(1,381	)			44,108
Total available for sale	$	200,705			$	25		$	(19,438	)		$	181,292		$	207,309		$	58		$	(14,345	)		$	193,022
	Amortized Cost				Gross Unrecognized Gains			Gross Unrecognized Losses				Fair Value			Amortized Cost			Gross Unrecognized Gains			Gross Unrecognized Losses				Fair Value
	(dollars in thousands)
Securities held to maturity
State and municipal	$	43,350			$	—		$	(9,582	)		$	33,768		$	44,205		$	3		$	(7,985	)		$	36,223
Total held to maturity	$	43,350			$	—		$	(9,582	)		$	33,768		$	44,205		$	3		$	(7,985	)		$	36,223

(3) Tangible book value per common share is a non-GAAP financial measure derived from GAAP based amounts. Tangible book value per common share is calculated by excluding the balance of goodwill and other intangible assets from common stockholders’ equity. Tangible book value per common share is calculated by dividing tangible common equity by common shares outstanding, as compared to book value per common share, which is calculated by dividing common stockholders’ equity by common shares outstanding. Management believes this is consistent with bank regulatory agency treatment, which excludes goodwill and other intangible assets from the calculation of risk-based capital.

		As of
	9/30/22			6/30/22			3/31/22			12/31/21			9/30/21
Tangible Book Value Per Share	(in thousands, except share and per share data)
Common stockholders’ equity	$	128,371		$	126,618		$	128,220		$	130,959		$	128,664
Less: Goodwill		6,252			6,252			6,252			6,252			6,252
Less: Intangible assets		1,797			1,861			1,925			1,989			2,053
Tangible common equity		120,322			118,505			120,043			122,718			120,359
Shares outstanding		7,639,033			7,640,680			7,622,157			7,594,749			7,602,686
Tangible book value per common share	$	15.75		$	15.51		$	15.75		$	16.16		$	15.83
Book value per common share		16.80			16.57			16.82			17.24			16.92

(4) Loans by Risk Category reflect management’s risk ratings based on categories aligned with the bank regulatory definitions.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20221019005228/en/

John T. Taylor

Chief Executive Officer

(502) 499-4800

Source: Limestone Bancorp, Inc.

FAQ

What were Limestone Bancorp's net income results for Q3 2022?

Limestone Bancorp reported a net income of $5.8 million for Q3 2022, or $0.76 per share.

How did total assets change for Limestone Bancorp by Q3 2022?

Total assets increased to $1.49 billion, up $72.6 million from the previous quarter.

What was the loan growth percentage for Limestone Bancorp in Q3 2022?

Limestone Bancorp experienced a loan growth of 5.0% in Q3 2022.

How much did non-interest income decline for Limestone Bancorp in Q3 2022?

Non-interest income declined by $208,000 compared to Q3 2021.